How to unlock the power of an inclusive and diverse leadership team
Board diversity is crucial to the success of charitable organizations and foundations. Here’s how to overcome barriers that may prevent you from reaping its benefits.
Effective board leadership for nonprofits, foundations and charitable organizations requires bold decision-making with a focus on advancing the organization’s mission. “For nonprofits to perform optimally, research and our experience suggest that leadership must represent a broad range of perspectives and expertise,” says Dianne Bailey, national philanthropic strategy executive, Bank of America Private Bank. “Still, many nonprofit boards lack meaningful diversity.”
What’s holding nonprofits back? And what can be done to overcome the structural and cultural barriers to building diverse boards?
Encouragingly, there are a few high-impact strategies for removing obstacles and creating opportunities to diversify your foundation or charitable organization’s governing board, which are explored in detail below.
The impact of diversity on your nonprofit’s board
For starters, there’s no shortage of ways to think about diversity. Some of the traits that typically come to mind are age, race/ethnicity, gender, sexual orientation and socioeconomic status. But we shouldn’t stop there.
Also consider diversity through experiences such as physical ability, marital/parental status, military service, dissimilar points of view or approaches to problem solving. When varied personal characteristics are combined at the board level, research confirms they help organizations and their leadership become more effective in realizing their goals. “And for nonprofits, in particular, having a diverse and inclusive board can strengthen your organization in several important ways,” says Bailey.
- Improves performance. Studies by McKinsey show that companies in the top quartile of gender and racial/ethnic diversity on their executive teams outperform companies in the bottom quartile by 25% and 36%, respectively.1
- Enhances sustainability. Homogenous leadership risks “group think” and may fail to develop a strategy that can meet the demands of the future.
- Addresses funder requirements. Nonprofit funders are starting to reconsider their support for organizations that are slow to diversify their leadership — and responding to any lack of diversity in their own boards with thoughtful plans.
- Amplifies the mission. Nonprofits need boards that include voices from the communities they serve to fully understand, identify and deliver the scope of services needed.
What is the current state of nonprofit board diversity?
Most nonprofit leaders recognize the importance of diversity, but research reveals a gap between their attitudes and reality. In the recent BoardSource report, Leading with Intent, 82% of nonprofit CEOs surveyed said that racial and ethnic diversity was “very important” or “important” for strategic leadership and governance of the organization. However, only 26% of the respondents place a high priority on demographic characteristics when recruiting new board members.2
As this chart illustrates, there is still much work to be done to narrow the disparity between the makeup of nonprofits’ boards and the communities they serve.
![Text and chart with title: What is the current state of nonprofit board diversity? Text reads: Most nonprofit leaders recognize the importance of diversity, but research reveals a gap between their attitudes and reality. In the recent BoardSource report, Leading with intent, 82% of nonprofit CEOs surveyed said that racial and ethnic diversity was “very important” or “important” for strategic leadership and governance of the organization. However, only 26% of the respondents place a high priority on demographic characteristics when recruiting new board members [Source: BoardSource, Leading with Intent, 2021]. As this chart illustrates, there is still much work to be done to narrow the disparity between the makeup of nonprofits’ boards and the communities they serve. Chart shows percentages in 10% intervals up to 100% on the x-axis; White, Black/African American, Latinx/Hispanic, Native American/American Indian/Indigenous, Asian/Asian American/PI, and Two or more races are on the y/axis. Light blue bars indicate Board Members, dark blue bars indicate US Population and gray bars indicate Board Chair. The White race is shown to have all three bars at or above 60% -- significantly higher than the percentages for any other race – with Board Chair the highest [~84%], Board Members [~78%] and US Population [ ~60%]; Black/African American percentages are all lower than ~15% -- with Board Chair the lowest [~7%], US Population the highest [~14%], and Board Members [~10%]; US Population for Latinx/Hispanic is the highest of its three [~19%], with Board Chair and Board Members lower [~5%]; Native American/American Indian/Indigenous has the lowest bars of any race, standing at [~2%] of the US Population, [0%] Board Chair, and [~1%] Board Members; Asian/Asian American/PI are [~6%] of the US Population, [~4%] Board Members and [~2%] Board Chair; Two or more races are [~4%] of the US Population, [~3%] Board Chair and [~1%] Board Members.](/content/dam/ust/articles/bodyimages/PB_W3589_Board_Diversity_INSET.png)
Source: BoardSource, Leading with Intent, 2021
How can you effectively diversify your nonprofit’s board?
There are a number of common structural issues and cultural barriers that need to be addressed to reap the benefits of diversity and inclusion. Press + on each issue to learn how:
The dynamics of any board begin with how it’s structured — which includes informal as well as formal systems related to recruiting, onboarding and engaging board members to advance your nonprofit’s mission.
Obstacles
Research shows that 90% of white Americans’ social networks are entirely white. This can hamper efforts to recruit diverse board candidates.3
Opportunities
Search beyond “friends of friends” of current board members. Tap into identity-based professional leadership organizations and networking groups.
Obstacles
The current practices of board and committee meetings may discourage potential members from serving.
Opportunities
Discuss accessibility with prospective recruits and existing members. Use virtual meetings to complement in-person meetings and prioritize flexibility so everyone can participate.
Obstacles
46% of boards have no term limits.4 Many organizations have term limits that are selectively enforced.
Opportunities
Review your governance documents regarding board terms. Consider how your board can be divided into groups with staggered terms to bring in new perspectives.
Obstacles
The traditional “give/get” policy for nonprofit fundraising may discourage joining for financial or philosophical reasons.
Opportunities
Allow board members to serve without asking them to donate or raise specific dollar amounts. Remember that board members can support fundraising in many ways, including by thanking donors.
Obstacles
Board members may feel undervalued if there aren’t clear expectations for their service and success or if they’re only expected to give or raise money.
Opportunities
Clearly defining roles helps in recruiting and assessing the performance of the board and individual members. Develop a formal onboarding process for new members so everyone is confident about serving purposefully.
A board’s culture is made up of often unwritten rules and shared values that shape how members communicate with each other, work as a team and make decisions.
Obstacles
Diversifying boards often introduces cultural change, new voices and new ways of working.
Opportunities
Prepare the existing board to welcome and fully include new members prior to their introduction.
Obstacles
New members may be the only ones representing a particular demographic on the board, and they may feel overlooked during board meetings or forced to speak for an entire group.
Opportunities
Consider recruiting and onboarding groups of three or more individuals representing new demographics when diversifying the board. Be vigilant to ensure all perspectives are articulated and heard during meetings.
Obstacles
New board members can feel excluded or slighted by even the most well-intentioned comments or behaviors.
Opportunities
Provide implicit bias education for the entire board to help recognize and diffuse subconscious prejudices. Board chairs, in particular, should receive training and support to ensure all members are heard and valued.
Obstacles
Some organizations deplete the enthusiasm of their board members when their service is expected but underappreciated.
Opportunities
Thank all board members often and in ways that recognize their personal gifts and contributions.
If you have questions or want to learn more about effective strategies for diversifying your board, please contact your advisor. We are here to help.
- 1 McKinsey, Diversity wins: How inclusion matters, May 2020.
- 2 BoardSource, Leading with Intent: Reviewing the State of Diversity, Equity and Inclusion on Nonprofit Boards, 2021; and U.S. Census Bureau, 2022.
- 3 PRRI, "PRRI Survey: Friendship Networks of White Americans Continue to Be 90% White," 2022.
- 4 BoardSource, Term Limits, 2022
Institutional Investments & Philanthropic Solutions (also referred to as “Philanthropic Solutions” or “II&PS”) is part of Bank of America Private Bank, a division of Bank of America, N.A., Member FDIC and a wholly owned subsidiary of Bank of America Corporation (“BofA Corp.”). Trust, fiduciary, and investment management services are provided by Bank of America, N.A., and its agents.
